Ford comments raise prospect of exit from manufacturing

The statement from the president of Ford Australia that manufacturing isn't necessary for R and D to continue in Australia has sparked more concern about the company's future. Although Ford hasn't revealed its plans beyond 2016, the company says the latest comments are not a hint.

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TONY EASTLEY: The future of local car manufacturing has been looking grim for several years. Now comments by the president of Ford Australia Bob Graziano have sparked even more concern.

Ford is in the process of slashing hundreds of manufacturing jobs and it hasn't committed to making cars in Australia beyond 2016.

Mr Graziano is quoted as saying that it's possible to have vehicle research and development facilities in Australia without actually manufacturing the cars.

This morning a Ford spokeswoman says Mr Graziano was quoted out of context.

Simon Lauder reports.

SIMON LAUDER: Tens of thousands of Australian jobs depend on car manufacturing so Ford's failure to commit to local manufacturing beyond 2016 has analysts and unions worried.

Yesterday at the launch of a new design tool at Ford's Broadmeadows facility in Melbourne, Ford Australia president Bob Graziano said he believes Ford can have research and development without manufacturing.

Victoria's assistant secretary of the AMWU Leigh Diehm disagrees.

LEIGH DIEHM: The two go hand in hand and we certainly are concerned by the comment.

SIMON LAUDER: Ford spokeswoman Sinead Phipps says the comment that manufacturing is not essential should not be taken as a hint.

SINEAD PHIPPS: Absolutely not. Bob was talking about manufacturing in terms of the context of the design process. He further went on to clarify that we believe we've lucky in Australia that we have all three vehicle development stages here, that we can design and engineer, we can manufacture and we can test here.

SINEAD PHIPPS: We have announced earlier this year a further $103 million investment in our locally produced vehicles that will come online in 2014. That takes those vehicles out through to at least the end of 2016. And we're currently investigating what comes after that.

SIMON LAUDER: Would one of the options for post-2016 be to have design and R and D in Australia but no manufacturing?

SINEAD PHIPPS: Look I'm not going to get into that kind of speculation.

SIMON LAUDER: Leigh Diehm from the manufacturing union says Ford should announce its intentions as soon as possible.

LEIGH DIEHM: I think everyone needs to be a little bit honest don't they really? You know if there's some intention of doing that into the future they're better off coming out and letting everyone know.

SIMON LAUDER: Just last month Ford Australia announced plans to axe 440 jobs at its Geelong and Broadmeadows plants by November. That's on top of 240 job cuts announced last year.